The trend toward healthier eating is making product attributes more powerful than brands, favoring specialty retailers with deeper selections of such items and a staff knowledgeable about them.
That’s according to Sprouts Farmers Market CEO Doug Sanders, speaking at an investor conference Wednesday in New York.
“The typical supermarket approach to natural foods has been to stock the top 20% of SKUs in their stores. Where Sprouts has an advantage would be on the offering itself,” Sanders said when asked about the effect of supermarkets increasing natural and organic selections during the BMO Farm to Market Conference.
“We’re shifting away from a heavy emphasis on a CPG-brand focus and moving into more food-attribute focus,” Sanders continued. “Folks are looking for organics, they’re looking for non-GMOs, they’re looking for gluten-free. They’re looking for raw foods, and they’re looking for non-dairy. If you look at the way a customer shopped five years ago versus what they’re evolving to today, you’ll see they are more attribute-focused than brand focused, and that requires a wider depth and breadth of product.”
Carrying a greater variety of products with those healthy attributes is helping Sprouts win more business from health-minded shoppers than traditional supermarkets, he argued.
Supermarkets, Sanders said, “are looking at [natural and organic] as ‘how much flow can I get from the top 20% of items?’, whereas we are looking it as ‘how can I appeal to how a customer is shopping today, and give them a broader selection of the products they are looking for?’ It’s two different approaches.”
Trained employees are also essential, he added, because “natural and organic doesn’t sell itself.” Sanders said Sprouts invests in training teams with responsibilities for 12 to 15 stores each. Sprouts stores also solicit training from product manufacturers. The Phoenix-based company prefers to promote employees from within so as to retain knowledgeable staff, he added.
“There is a level of product knowledge you need to have in order to effectively meet the needs of customers,” he said. “The more we teach [consumers] about our products, the more product trial we can promote, the more of the weekly shopping trip we can transition over the Sprouts.”
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